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Minutes clarify: Rate hike coming in September - John Silvia

Wednesday, August 19, 2015 - 03:38

Wells Fargo's John Silvia says he believes the Fed minutes from its July meeting clarify that the central bank will raise rates at its next meeting. Bobbi Rebell reports.

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And it found that those recent fed meeting are out joining me to talk about what we'll aren't what matter most is wealth are the chief economist John Silvia great to have you. Thank you are so what is the headline here. All of headliners offense still on the path for raising rates they think the labor watch it has improved and it was a lot of. Talk about that and they still expect. Inflation to get back up because 2% target. Over the medium term despite their current weakness in oil prices. Do you feel that we now have solid confirmation of a hike in September and it could this provide clarity for that. Yeah I think it does provide clarity because the big issue for them was some improvement. And the labor market and we're certainly getting that from the minutes that were expressed economy continues to improve. A lot of focus India China makes a little bit of a difference there is a risk there according to the Federal Open Market Committee. But it doesn't seem to be so significant as impact the US economic outlook. And it's interesting you bring up China because one thing that we did learn they talked about in addition to. To China with other macro economic issues that are global Greece came up Puerto Rico with this that's apparently. Yeah I think from the feds. Point of view body does does a real focus on to what extent. To global economy and these developments impact. Fed policy and it seems right now the Fed is still primarily domestic in focus. It recognizes. The global issues but it's still the US economy that matters. Inflation did seem to be some concerns about lagging inflation. Yet this is to pick up on some of the comments that we've tried the last few weeks from some of the Federal Reserve regional presidents. That inflation is is really not moving ahead as much as they had expected so this seems to be a few. People at the Fed who are very cautious yet but the majority seems comfortable with still no expectation that we're gonna get to that 2%. In the medium term. They can't address the strong dollar that's something that's been heard a lot of US businesses as we go through. Earnings reports from various corporations also energy issues they felt they were temporary what do you make of that. Yet as it is interesting I think some of the weakness in terms of the global economy. Maybe now someone medium term. The dollar strength though I think his ball longer term what we're seeing here is a persistence in US economic growth stronger. Than expected. Global economy weaker than expected I think the dollar's strong enough for a longer period of time. An alpha talked about concerns about consumer spending what's your take on that. Get a consumer spending numbers declined to while view is a pretty strong. It seems as if the consumer has access to credit. That damn household wealth has improved over the last year there are more jobs being created. And the wages and salary data is pretty solid so crop. Point of view. Consumers are probably the strongest sector in the US economy. Are well last question so you're betting on a rate hike in September. Where they go from there isn't going to be consistent pattern of small rate hikes or is it going to be more erratic and as they always say data dependent. Bobbie I think it's very much data dependent I it's gonna create a lot turmoil in the markets because it's going to be erratic. Maybe something in September may be nothing until next march maybe march and June it's there's not gonna be a consistent pattern very data dependent. Apparently that that thank you so much thank you. Our thanks to wells Fargo's John Silvia and by the rebel bit is writers.

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Minutes clarify: Rate hike coming in September - John Silvia

Wednesday, August 19, 2015 - 03:38